Insurance underwriting

process
Objective
To provide knowledge and understanding of the role of underwriting including
identification, assessment and acceptance of risk, rating and relevant financial factors.

Summary of learning outcomes Number of

questions in the
examination*
1. Understand the material circumstances relating to the insurance 5
underwriting process
2. Understand underwriting procedures relating to the insurance underwriting 15
process
3. Understand insurance policies in relation to the insurance underwriting 10
process
4. Understand renewals and cancellation in relation to the insurance 3
underwriting process
5. Understand personal insurances in relation to the insurance underwriting 3
process
6. Understand commercial insurances in relation to the insurance underwriting 3
process
7. Understand the main ‘support’ type insurance services available 2
8. Understand underwriting considerations in relation to the insurance 13
underwriting process
9. Understand the principles and practices of pricing 10
10. Understand pricing factors within the context of the insurance underwriting
5
process
11. Understand managing exposure within the context of the insurance 6
underwriting process
*The test specification has an in-built element of flexibility. It is designed to be used as a guide for study and is not a
statement of actual number of questions that will appear in every exam. However, the number of questions testing each
learning outcome will generally be within the range plus or minus 2 of the number indicated.

Important notes
• Method of assessment: 75 multiple choice questions (MCQs). 2 hours are allowed for this examination.
• This syllabus will be examined from 1 January 2019 until 31 December 2019.
• Candidates will be examined on the basis of English law and practice unless otherwise stated.
• Candidates should refer to the CII website for the latest information on changes to law and practice
and when they will be examined:
1. Visit www.cii.co.uk/updates
2. Select the appropriate qualification
3. Select your unit on the right hand side of the page

Published October 2018 IF3

Copyright © 2018 The Chartered Insurance Institute. All rights reserved.
 1. Understand the material 5. Understand personal insurances in
circumstances relating to the relation to the insurance
insurance underwriting process underwriting process
1.1 Explain why an underwriter needs to be 5.1 Describe the basic features and typical
aware of material circumstances in policy cover of motor insurance, health
assessing a risk insurance, household insurance, travel
1.2 Explain the concept of the duty of fair insurance and extended warranties
presentation, to whom it applies and how
the duty may be modified 6. Understand commercial insurances
1.3 Define the words peril and hazard as used in relation to the insurance
in the insurance industry and the underwriting process
relationship between them 6.1 Describe the basic features and typical
1.4 Explain the significance of moral and policy cover of property insurance,
physical hazard for underwriters and how pecuniary insurance and liability insurance
they are manifested
1.5 Describe the methods used by underwriters 7. Understand the main ‘support’ type
to obtain material information insurance services available
7.1 Describe the basic features of additional
2. Understand underwriting ‘support’ type insurance services available
procedures relating to the insurance with specific reference to help lines,
underwriting process authorised repairers and suppliers, risk
control/advice and uninsured loss recovery
2.1 Describe the general and specific questions services
asked of proposers
2.2 Describe the procedure relating to 8. Understand underwriting
quotations considerations in relation to the
2.3 Explain the methods by which underwriters insurance underwriting process
gather material information and their legal
significance 8.1 Describe the key underwriting criteria for
motor insurance, health insurance and
2.4 Describe the different ways in which personal insurances
premiums are calculated
8.2 Describe the key underwriting criteria for
2.5 Explain the legal significance of procedures commercial property insurance, including
relating to the issue of cover notes, policies fire and special perils, theft insurance, glass
and certificates of insurance insurance and money insurance
2.6 Describe the relevance of premium 8.3 Describe the key underwriting criteria for
payment for valid cover pecuniary insurances, including legal
2.7 Describe the methods used by insurers to expense insurance and business
collect premiums including instalment interruption insurance
facilities 8.4 Describe the key underwriting criteria for
2.8 Describe the features of Insurance Premium liability insurance, including employers’
Tax liability, public liability, pollution liability,
products liability and professional
3. Understand insurance policies in indemnity
relation to the insurance 8.5 Describe the key underwriting criteria for
underwriting process extended warranties
3.1 Describe the structure, functions and 8.6 Describe the procedures commonly used to
contents of a policy form, including the discourage individuals from making
policy schedule fraudulent claims
3.2 Explain the meaning and significance of 8.7 Describe the procedures commonly used to
common policy exceptions and conditions detect fraudulent claims
including terrorism cover 8.8 Explain the consequences of fraudulent
3.3 Explain how excesses, deductibles and claims for the insurer, their insureds and
franchises are used the fraudulent claimant
3.4 Explain the distinction between warranties, 8.9 Explain the effect on insurance of the
conditions and representations current Disability Discrimination/Equality
Act 2010 and Data Protection legislation
4. Understand renewals and
cancellation in relation to the
insurance underwriting process
4.1 Describe the legal significance of
procedures relating to renewals
4.2 Explain how cancellation clauses operate

Published October 2018 2 of 4

Copyright © 2018 The Chartered Insurance Institute. All rights reserved.
 9. Understand the principles and
practices of pricing
9.1 Describe the sources, availability and types
of data essential to the underwriting
process
9.2 Explain the importance of claims
information on underwriting terms/
premium rates
9.3 Explain the nature of risk in terms of
frequency and severity of claims
9.4 Explain the significance of the claims loss
ratio on premiums/acceptance of risk
9.5 Explain the distinction between
underwriting year, policy year, accounting
year and calendar year
10. Understand pricing factors within
the context of the insurance
underwriting process
10.1 Define risk premium and its key features
10.2 Describe the reporting factors of expenses,
return on capital, investment income, tax
and intermediary remuneration
11. Understand managing exposure
within the context of the insurance
underwriting process
11.1 Describe the basic factors influencing the
market cycle
11.2 Describe the principles of risk
accumulation
11.3 Describe the basic reinsurance
considerations including the types of
reinsurance
Published October 2018
Copyright © 2018 The Chartered Insurance Institute. All rights reserved.
Reading list
The following list provides details of various
publications which may assist with your studies.
Note: The examination will test the syllabus
alone.
The reading list is provided for guidance only
and is not in itself the subject of the
examination.
The publications will help candidates keep up-
to-date with developments and will provide a
wider coverage of syllabus topics.
CII/Personal Finance Society members can
borrow most of the additional study materials
below from Knowledge Services.
CII study texts can be consulted from within the
library. For further information on the lending
service, please go to www.cii.co.uk/knowledge.
CII study texts
Insurance underwriting process. London: CII.
Study text IF3.
Books (and ebooks)
Bird’s modern insurance law. 10th ed. John Birds.
Sweet and Maxwell, 2016.
Insurance theory and practice. Rob Thoyts.
Routledge, 2010.*
‘Insurance intermediaries: underwriting agents’ in
Colinvaux’s law of insurance. 11th ed. Prof. Robert
Merkin. London: Sweet & Maxwell, 2016.
Insurance law in the United Kingdom. 3rd ed. John
Birds. The Netherlands: Kluwer Law International,
2015.
Pricing in general insurance. Pietro Parodi. CRC
Press, 2015.
Factfiles and other online resources
CII fact files are concise, easy to digest but
technically dense resources designed to enrich the
knowledge of members. Written by subject
experts and practitioners, the fact files cover key
industry topics as well as less familiar or specialist
areas of general insurance, life, and pensions and
financial services, with information drawn together
in a way not readily available elsewhere. Available
online via www.cii.co.uk/ciifactfiles (CII/PFS
members only).
The Insurance Institute of London (IIL) podcast
lecture series features leading industry figures and
subject experts speaking on current issues and
trends impacting insurance and financial services.
Available online at www.cii.co.uk/ciifactfiles (CII/
PFS members only).
• Recent developments in general insurance
underwriting. Massimo Vascotto.
• Principles and trends in general insurance
underwriting. Massimo Vascotto.
• Recent developments to Solvency II. Brad
Baker.
• The regulatory framework. Simon Collins.
3 of 4
 Additional articles and technical bulletins are
available under the Underwriting section of the
website at www.cii.co.uk/knowledge/
underwriting.

Periodicals
The Journal. London: CII. Six issues a year. Archive
available online at http://www.cii.co.uk/
knowledge/journals-and-magazines/the-journal-
archive/ (CII/PFS members only).
Post magazine. London: Incisive Financial
Publishing. Monthly. Available online at
www.postonline.co.uk.

Reference materials
Concise encyclopedia of insurance terms.
Laurence S. Silver, et al. New York: Routledge,
2010.*
Dictionary of insurance. C Bennett. 2nd ed.
London: Pearson Education, 2004.
The insurance manual. Stourbridge, West
Midlands: Insurance Publishing & Printing Co.
Looseleaf, updated.
The insurance manual. Sadler, John. Stourbridge,
Worcs: Insurance Publishing & Printing Co.
Looseleaf updated annually.
* Also available as an ebook through Discovery via
www.cii.co.uk/discovery (CII/PFS members only).

Examination guide
If you have a current study text enrolment, the
current examination guide is included and is
accessible via Revisionmate
(www.revisionmate.com). Details of how to access
Revisionmate are on the first page of your study
text.
It is recommended that you only study from the
most recent version of the examination guide.

Exam technique/study skills

There are many modestly priced guides available
in bookshops. You should choose one which suits
your requirements.
The Insurance Institute of London holds a lecture
on revision techniques for CII exams
approximately three times a year. The slides from
their most recent lectures can be found at
www.cii.co.uk/iilrevision (CII/PFS members only).

Published October 2018 4 of 4

Copyright © 2018 The Chartered Insurance Institute. All rights reserved.